In this episode of our new series for beginners “Stock Market 101,” you will learn the fundamental principles of why the earnings go up.
In this fifth video, Weronika Pycek breaks down why earnings go up over time, what are inflation, productivity and stock buybacks.
The goal is to provide elementary knowledge of investing for beginners so you too can start your journey towards building wealth over time.

IN THIS EPISODE, YOU’LL LEARN:
00:00 – Introduction
00:28 – Why Do Earnings Go Up?
01:29 – What is Inflation?
02:17 – What is Productivity?
03:42 – What is Innovation?
04:46 – What is International expansion?
06:20 – What is Population Growth?
07:30 – What are Acquisitions?
09:04 – What are Stock buybacks?
11:22 – Conclusion

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– Why Does The Stock Market Go Up by Brian Feroldi –

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Why Investing In Inflation And Stock Buybacks Is A Smart Move? | Stock Market 101 For Beginners

Investing in the stock market can be an intimidating prospect, especially for beginners. With a plethora of investment options available, it can be challenging to determine which investments are the most profitable and secure. In this article, we will enlighten you about two investment strategies that have proven to be advantageous for many investors – investing in inflation and stock buybacks.

Inflation is an important economic concept that refers to the general increase in prices of goods and services over a period of time. While inflation may seem like a cause for concern, it can also present opportunities for investors. Investing in inflation can be a smart move as it provides a hedge against rising prices. When inflation occurs, the value of money decreases, and as a result, the prices of goods and services increase. However, there are investments available that can help investors stay ahead of inflation’s detrimental effects.

One popular inflationary investment option is Treasury Inflation-Protected Securities (TIPS). TIPS are government-issued bonds that offer investors inflation protection. These bonds provide a fixed interest rate, but their principal value adjusts with the Consumer Price Index (CPI), which measures changes in prices. By investing in TIPS, investors can ensure that their investment keeps pace with inflation, ultimately preserving their purchasing power.

Another strategy that investors can adopt is investing in companies that engage in stock buybacks. Stock buybacks occur when a company repurchases its own shares from the market. This benefits shareholders in several ways. Firstly, as a company reduces its number of outstanding shares, the ownership of existing shareholders increases. This leads to an increase in stock value and can result in higher share prices.

Furthermore, stock buybacks can be viewed as a sign of a company’s confidence in its future prospects. When a company repurchases its shares, it signifies that they believe the stock is undervalued. This can attract more investors, ultimately leading to a rise in demand and share prices.

Additionally, stock buybacks can also provide shareholders with increased earnings per share (EPS). As the company repurchases its own shares, the existing earnings get divided among a smaller number of shares, resulting in higher EPS. Higher EPS is often positively perceived by investors, leading to increased demand for the company’s stock.

Investing in inflation and stock buybacks can be lucrative, but it is essential to conduct thorough research before making any investment decisions. Beginners should start by reading financial news, understanding economic indicators, and analyzing company fundamentals. By familiarizing themselves with the stock market, individuals can make informed investment choices.

Moreover, diversification is key when investing. By spreading investments across different asset classes, industries, and geographical regions, individuals can minimize risk and maximize potential returns. Alongside investing in inflation and stock buybacks, beginners should consider investing in other sectors, such as technology, healthcare, or real estate investment trusts (REITs), to build a well-rounded investment portfolio.

In conclusion, investing in inflation and stock buybacks can be a smart move for beginners in the stock market. Investing in inflation can protect against rising prices, whereas stock buybacks can increase shareholder value and attract more investors. However, it is essential to conduct thorough research and diversify investments to mitigate risk. With a sound understanding of the stock market and careful decision-making, individuals can lay the foundation for a successful investment journey.